Global money is quietly reshuffling across Asia — and South Korea is the winner. In a survey of dozens of major global financial institutions by the Asia Securities Industry & Financial Markets Association (ASIFMA) and KPMG, half said they plan to grow their South Korea operations over the next three years — up from about a fifth a year earlier, Investing.com reported. Appetite for China held flat (around 40%), while India slid down the priority list. "Competition within Asia has intensified," ASIFMA's chief executive Peter Stein noted; five years ago, China was the runaway favorite.
Why South Korea
Three things are pulling capital toward Seoul.
Governance reform. Korea's Corporate Value-up Program, launched in 2024 and strengthened since, pressures companies to use capital more efficiently and return more to shareholders via dividends and buybacks, as AllianceBernstein has detailed. Lawmakers also cut the tax on dividends to sweeten the deal. The aim is to fix the "Korea discount" — the long-standing tendency of Korean shares to trade cheaply (often below book value) versus global peers.
Index inclusion. South Korea is set to join a major global government-bond index in 2026, a change expected to draw tens of billions of dollars in passive inflows as index-tracking funds rebalance into Korean bonds — a mechanical, sticky source of demand. (Figures circulating are estimates; treat them as directional.)
A tech powerhouse. Korea is home to Samsung, SK Hynix and a deep semiconductor-and-manufacturing base — exactly the exposure global investors want as AI and chip demand booms, a theme Boursel has tracked through Korea's massive chip investments.
Why the caution elsewhere
The survey's wariness toward China reflects familiar worries: geopolitical risk, regulatory unpredictability and slower growth, even as some money trickles back into select sectors. India, by contrast, is less about fear than about price and friction — a strong multi-year rally has left valuations stretched, and foreign investors cite access and compliance hurdles. (These are the survey respondents' stated concerns, presented neutrally — not a verdict on any market's returns.)
Why it matters
For markets, this is a story about where global capital goes in Asia — and a vote of confidence in the idea that reforms get rewarded. Korea's pitch is that better corporate governance, clearer rules and index-inclusion tailwinds make it a more investable version of Asian growth than the alternatives right now. If the value-up push keeps delivering and the bond-index inflows arrive on schedule, the rerating of Korean assets could have further to run.
The caveats are real: survey sentiment is intentions, not flows, and it can reverse; Korea has its own politics and a heavy reliance on exports and the chip cycle. And "cautious on China" has been a recurring refrain that global investors have, at times, walked back. But the direction in this snapshot is clear — and it lines up with a broader rethink of how to play Asia: favor the markets fixing their flaws, and demand a higher bar from the giants. Boursel offers no view on any individual market; the signal worth noting is that, for now, global finance is leaning toward Seoul.
